Barneys: Coming Around Again

Barneys Plans to Reclaim Its Chelsea Location and Expand Downtown by 2017

The Chelsea branch of Barneys New York in 1997, the year it closed.Credit
Marilynn K. Yee/The New York Times

Twenty years after it decamped to its shiny bauble of a store on Madison Avenue, and 17 years after leaving its landmark Chelsea location in the hands of a discount retailer and later a museum specializing in the art of the Himalayas, Barneys New York is heading back home.

Barneys executives are expected to announce on Thursday that by 2017 they will reopen a downtown branch in the store’s original location at Seventh Avenue and West 17th Street, taking back the space now occupied by Loehmann’s, which is in bankruptcy proceedings. Mark Lee, the chief executive of Barneys, said the downtown location will take up five floors and approximately 57,000 square feet.

Loehmann’s is expected to close all its stores shortly. In court papers, lawyers for the chain said, “a liquidation of the debtors’ entire retail operation is the best solution for maximizing stakeholder recovery.”

The Rubin Museum of Art, which is in part of the old Barneys space, will not be affected by the move, people involved in the transaction said.

Richard Perry, the hedge fund manager whose firm, Perry Capital, has owned a controlling stake in Barneys since 2012, said that the possibility of returning to 17th Street was first brought up by Mr. Lee more than a year ago. Initially, Mr. Perry said, he was not in favor of the idea.

“The reason this company got in trouble is because they borrowed too much for real estate to build stores,” he said.

But a number of things turned him around to the idea.

First, Mr. Perry said, Barneys has posted record sales this year, one in which the luxury market has experienced enormous growth. The Madison Avenue store, he said, is posting “the biggest numbers we’ve ever done.”

And the rent in Chelsea for commercial real estate is still relatively cheap compared with SoHo and the meatpacking district, even as luxury apartment buildings like Walker Tower (on West 18th Street) and the St. Vincent’s Hospital development project (at the north end of the West Village) are springing up almost by the day and bringing in buyers at record prices.

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Barneys New York opened its Madison Avenue store in 1993.Credit
Eric Thayer/Reuters

“When Barneys closed there 17 years ago, it was a very different world there,” Mr. Perry said. “Now, condos are going for $3,000 to $4,000 a square foot.”

At the same time, there is little competition in Chelsea and its surrounding neighborhoods, aside from Jeffrey and Scoop in the meatpacking district, and a few small specialty retailers on Eighth Avenue, like Camouflage.

Designers certainly seem enthusiastic about the store’s return to its original downtown location.

“I think it’s the best idea,” said Diane von Furstenberg. “It’s so good. They should never have abandoned the Chelsea store, and this will bring them good luck because they’re going back to their DNA.”

George Malkemus, the president of Manolo Blahnik, said: “Manolo and I are over the moon. For me it stood for New York long before SoHo and the meatpacking district. It was the sexiest place to shop.”

Barneys New York first moved into Chelsea in 1923, when Barney Pressman pawned his wife’s engagement ring for $500 and opened a tiny store specializing in discounted men’s suits. By the time he retired in 1975, it had grown to several floors and was doing $35 million a year in business, according to Joshua Levine’s book, “The Rise and Fall of the House of Barneys.”

Barney’s son, Fred, took over and began offering women’s clothes and more designer wear by young designers like Giorgio Armani, whose monochromatic pantsuits were available in the United States only on West 17th Street at the time.

In the late ’80s and early ’90s, under Fred’s son Gene, the store became synonymous with the image of New York propagated in the novel “Bright Lights, Big City.” Designers with hard-to-pronounce last names like Kawakubo and Fujiwara were all the rage, but the thing that kept the store in business was pairing their wares with work clothes, giving the ordinary suit buyer the illusion he was somehow doing something edgy merely by shopping at Barneys.

“It was the yuppie era,” said Glenn O’Brien, who wrote the copy for many of the company’s best-known ads. “There was all this Wall Street money. Guys were dressing up and wearing Italian suits and driving BMWs. It was that first moment of shamelessly flaunting it.”

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Loehmann’s, in bankruptcy, is to make way for the new Barneys store in Chelsea.Credit
Ramsay de Give for The New York Times

Steven Meisel shot ad campaigns with Linda Evangelista, and Simon Doonan took over the store’s windows, which featured stunts like a “Hello Kitty” nativity scene. (Mr. Doonan said later that it was intended as a “sardonic commentary on the commercialization of Christmas,” but it nevertheless was taken out of the windows when religious groups protested and the store received bomb threats.)

“It was the first department store I ever went to,” said the designer Zac Posen. “There was a grand mezzanine and I just remember there were black Alaïa mannequins lining the ground floor of what felt like a large atrium. It was like a jewel box. It glowed.”

In 1993, Barneys opened its Madison Avenue flagship in 240,000 square feet with a party for the ages. There, to the left, walking across the architect Annabelle Selldorf’s mosaic tile floors, was Bianca Jagger. There, to the right, Calvin Klein.

“I remember Barry White singing,” said Kim Hastreiter, an editor of Paper magazine. “It was the best party.”

Unfortunately, the festive mood soon evaporated. Owing to the cost of erecting the store and a series of poorly received Barneys stores around the country, the Pressmans wound up in bankruptcy and the store was sold off, spending more than a decade bouncing from investor to investor.

Mr. Perry, a snazzy dresser with a taste for skinny suits and Pop art, has heard the complaints that the current Barneys is boring looking and has become indistinguishable from other department stores. (Mr. O’Brien said, for example, that they had “messed up” Ms. Selldorf’s design.) But the store’s strong financial performance in recent months has left Mr. Perry bullish and convinced that he has the right executive team with Mr. Lee and Daniella Vitale, the chief operating officer.

He said he liked that the new store is a nod to the brand’s past, but continued to stress that his primary motivation is finance, not nostalgia.

“If you’d told me next door was a better location, cleaner, easier, cheaper, I would have said, ‘Go there,’ ” he said, adding that he was more focused on the bottom line and whether the new space would be profitable. “I think we will be very profitable.”